Finding Success in Alberta’s Oil Plays

TriOil Resources

TriOil Resources Ltd. has a winning plan. The company’s careful – and relatively unique – strategy has brought the Western Canadian business remarkable growth and cemented its place in the industry.

Since its founding just four years ago, the junior oil and gas exploration and production company has built significant land positions on a portfolio of emerging light oil resource plays, specifically targeting the Cardium and Dunvegan oil trends at Kaybob, Alberta. “We have generally been focused on early recognition of resource plays – new plays that either the industry is just starting to get into or hasn’t gotten into yet,” President Andrew Z. Wiacek shares.

TriOil certainly is not alone in that space, but the company’s approach to it sets it apart. “Our focus has been identifying one or two of those and then trying to obtain a fairly large land base on those plays. So instead of having half a dozen sections on five or six different plays we will have 50 or 60 sections on two or three plays.”

Focusing on a concentrated asset base has certainly proven lucrative. “We saw tenfold growth in four years,” Mr. Wiacek reports. In its early days, TriOil produced about 400 BOE (Barrel of Oil Equivalent) a day; today, the team’s successful strategies have brought that up to 4,000 BOE a day. Mr. Wiacek attributes an estimated 75 percent of the company’s expansion to organic growth, while the remaining 25 percent of growth was the result of “a small acquisition along the way.”

TriOil’s use of innovative technology has also been foundational to the company’s ongoing growth and success. The team has been quick to capitalize on improvements in horizontal drilling and multi-stage fracture stimulation technologies to seize opportunities throughout Alberta’s emerging Cardium and Dunvegan oil trends. “We are open to changing methods of drilling and completion techniques,” Mr. Wiacek points out. “We have been pretty successful in identifying issues… and looking at different ways to get more production and bigger reserves out of the ground. I think that’s been a key [to success] and sets us apart.”

The team has also seen managed to lower costs by altering their drilling techniques. They have been careful to maintain a measured approach while pursuing new technology, however. “We’ve been leading edge but not bleeding edge,” Mr. Wiacek insists.

Last year, TriOil’s success caught the attention of ORLEN Group, one of the largest petroleum and petrochemical corporations in Central and Eastern Europe and the largest in Poland. In November 2013, ORLEN Upstream International B.V., a wholly owned subsidiary of ORLEN Upstream sp. z o.o and part of ORLEN Group, acquired the Canadian firm. ORLEN Upstream was established to implement PKN ORLEN’s strategy regarding exploration and production of hydrocarbons. “That [acquisition] was their first entry into western Canada,” Mr. Wiacek reports. “We are their exploration and production arm essentially.”

While TriOil’s ownership has changed, its core values have stayed the same. The company has always prided itself on being a supportive member of the local community, and Mr. Wiacek says that this commitment will continue. This includes giving back financially, sponsoring everything from local rodeos to a new provincial park and a new community recreation centre.

TriOil will also continue to work closely with locals, Mr. Wiacek insists. “We operate primarily at the Lochend area just northwest of Calgary,” he explains. “It is close to the city, so there are a fair number of residents in and around where we are drilling. We are obviously quite mindful [to] listen to the residents out there. We try to be a good partner with the community and make sure they know who we are and who they need to talk to if they have any issues.”

To help facilitate this communication, TriOil has become a member of LIPG (Lochend Industry Producers Group), a forum made up of local drilling companies focused on addressing any issues that the community might have. “Through that [group] we have really good communication with the landowners and the stakeholders in the area,” Mr. Wiacek reports. LIPG’s primary purpose is to reduce impact in the Lochend area, and the member companies are “committed to integrity, safe and fair practices and to partnering with the community for responsible resource development,” according to the LIPG website.

Maintaining positive relationships with industry partners, landowners, and the community is crucial, particularly when dealing with challenges. For instance, changes made to Alberta’s regulations have caused some complications within the industry recently. “They have revamped the structure,” Mr. Wiacek says of the province’s regulatory burden. The result has been a lack of clarity regarding some key processes. For instance, “if landowners have any objections to any of the work we are doing, there don’t seem to be any set guidelines and set timelines for any resolution. That is something we are trying to work through.” The team wants to be proactive in developing the best possible procedure and maintaining positive relationships with landowners.

TriOil also puts a great deal of effort into maintaining good relationships within the company. “People are the company’s main asset,” Mr. Wiacek points out, and the team works hard to keep the staff happy and encourage unity throughout the organization. Most of the executives have been together since the company’s inception, so staying on the same page is relatively easy. For example, they agree that open communication is key to maintaining strong relationships with employees. “We try to have an open door policy for all the staff. If they have any issues they can talk to any one of us and we can resolve it.” The team also coordinates numerous corporate activities throughout the year. “We try to make it fun. It is always important to reward everyone and make sure that we recognize hard work and success. [We want the staff] to enjoy that success.”

A generous compensation package is also important, both to retain talent and show appreciation. Since TriOil was acquired, compensation is “a little bit in flux” as TriOil transitions from a public to a private company, but a new plan is already being developed. “We are no longer a public company, so the typical long term incentive plan such as stock options are not feasible right now,” Mr. Wiacek points out. “So we are in the process of revamping that and putting together a long term incentive plan based on the growth of the company. I think it will be quite rewarding for everyone.”

Tri Oil also appreciates its industry partners in addition to its employees. “I’d like to thank all of our service providers for their support in helping TriOil achieve the success we have,” Mr. Wiacek says. “Without their knowledge, equipment and technology, we wouldn’t be where we are today.”

Truly, the company is in a great place today. TriOil’s BOE has skyrocketed over its four year history – and is likely to continue to rise. In fact, the goal is to grow production to between 15,000 and 20,000 BOE per day within the next four or five years.

Of course, technology will continue to play a foundational role in TriOil’s expansion. “We will continue to monitor new technologies as they come along and see how applicable they may be for the things we are working on,” Mr. Wiacek says. This will include working to capitalize on improvements in horizontal and multi-stage fracture technologies in order to exploit the company’s multi-year drilling inventory as effectively as possible.

Overall, TriOil plans to grow production and reserves through a combination of exploitation and exploration drilling as well as strategic acquisitions, while also maintaining financial flexibility through a strong balance sheet. With a proven track record already in place, the team is confident that they will meet these goals going forward.

For more information about TriOil Resources, please visit http://www.trioilresources.com/

August 19, 2017, 2:24 PM EDT

A Model that Addresses Infrastructure Demand

The Labourers’ International Union of North America (LiUNA) is a National Union representing over 500 000 members – over 110 000 in Canada with an International Office in Hamilton, Ontario. It has Local Unions across the country and is the most common union of construction, healthcare, waste management, and show service workers in this country. In fact, LiUNA, established in 1903, is Canada’s largest Building Trades Union.